**London**: A recent survey by Taulia indicates increased supplier interest in early payment solutions to improve cash flow, despite a continued trend of late payments. While many suppliers exhibit optimism for 2025, barriers to adopting these solutions remain significant across various industries and regions.
An annual supplier survey conducted by working capital management solutions provider Taulia has highlighted a growing optimism among businesses regarding their prospects for 2025. The survey, published earlier this month, reveals that suppliers are increasingly inclined to explore early payment options to enhance cash flow consistency.
According to the findings, nearly two-thirds of surveyed suppliers expressed a desire for early payment solutions. Specifically, one-in-four suppliers indicated they would prefer to receive early payments for every customer and transaction. Additionally, 19% reported a willingness to opt for early payments most of the time. This data underscores a significant shift in supplier sentiment, particularly as 51% of respondents noted that their buyers typically pay late. This figure has remained unchanged from the previous year but marks a notable rise from the 38% recorded in 2019. A substantial portion of these suppliers reported that their invoices are often settled well beyond established due dates, with one-fifth stating that payments are made more than 30 days late; this includes 7% of suppliers whose payments regularly exceed 45 days. In stark contrast, only 3% indicated that their clients typically paid early.
Ilkim Saracel, Director and Assistant Treasurer at Nextracker, a manufacturer of solar trackers, commented on this trend, stating, “Early payment option requests by suppliers are definitely increasing.” Saracel, who has previous experience at a global Fortune 500 contractor manufacturer, noted that the dynamics of demand have shifted significantly, stating, “Now the demand comes from the suppliers. They are much more educated and really like these programmes.”
Despite the growing interest from some suppliers, the willingness to adopt early payment financing solutions is not universal. For instance, the group treasurer of a major international footwear brand reported a lack of enthusiasm from their suppliers regarding supply chain finance options, despite multiple proposals made at supplier conferences over the past 18 months. “We have proposed a supply chain finance solution at our supplier conferences a number of times in the last 18 months or so and there has been zero take-up or even interest,” he explained.
Overall, more than half of the survey participants expressed a “very optimistic” outlook for the current business environment, even amidst uncertainties stemming from rising tariffs and protectionism. One treasurer from the footwear industry shared insights on how tariffs have affected their operations, stating, “We get the tariffs questions a lot from our banks, but the bottom line for us is that we don’t manufacture in any of the countries that the US administration seems to be targeting for higher tariffs.”
Among the reasons cited for not engaging with early payment solutions, many suppliers pointed to strong cash positions and high associated costs. Additional barriers included business structures that complicated early payment arrangements, billing cycles that hindered swift payment processes, and company policies against early payments or commitments to other financing options.
The survey also indicated that the level of optimism among suppliers varies considerably by region. For example, sentiment in Argentina has improved, buoyed by new policies aimed at addressing high inflation. Spain has also experienced a rise in optimism, attributed to its robust economic growth. In contrast, suppliers in western Europe, particularly in Germany and France, reported lower levels of confidence, reflecting ongoing geopolitical and economic challenges in the region.
Recognising the need for flexibility in current market conditions, many businesses are reportedly seeking diverse external capital solutions. Approximately one-in-five suppliers indicated they are utilising credit cards, lines of credit, early payments on invoices, and debt factoring as ways to enhance their financial strategies. Bob Glotfelty, Chief Growth Officer at Taulia, emphasized the critical importance of these flexible working capital solutions, stating, “By unlocking liquidity, these solutions help businesses strengthen their cash flow, adapt to market changes and build resilience across their supply chains.”
Source: Noah Wire Services
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